7/22/2010 DHS Rules on Electronic Signature and Storage of Form I-9

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July 28, 2010

On July 22, 2010 the Department of Homeland Security published a final rule on the acceptance of electronic signatures and storage of the Form I-9. The rule, scheduled to take effect August 23, 2010, allows employers to prepare, sign, scan and store the form electronically as long as certain criteria is met. See below.

Employers must complete a Form I-9 within three business (not calendar) days;

Employers may use paper, electronic systems, or a combination of paper and electronic systems;

Employers may change electronic storage systems as long as the systems meet the performance requirements of the regulations;

Employers need not retain audit trails of each time a Form

I-9 is electronically viewed, but only when the Form I-9 is created,completed, updated, modified, altered, or corrected; and

Employers may provide or transmit a confirmation of a Form I-9 transaction, but are not required to do so unless the employee requests a copy.

SHRM’s Allen Smith, J.D. writes that, “Several commenters on the interim final rule requested guidance on the storage of ancillary documents used to verify an employee’s identity and eligibility to work in the United States. DHS clarified that employers may, but are not required to, copy or make an electronic image of a document used to comply. It cautioned, though, that employers should apply consistent policies and procedures for all employees to avoid discrimination.

DHS noted that the Form I-9 and verification documentation may be stored in a separate Form I-9 file or as part of an employee’s other employment records. In addition, only the pages of the Form I-9 containing employer- and employee-entered data need be retained. Other pages of the current form are instructions for completing the Form I-9 and need not be retained.

DHS agreed with comments that suggested that it is unnecessary to require an audit trail to record every time a Form I-9 is simply viewed or accessed but not modified. When the Form I-9 is created or modified, though, a secure and permanent record must be created establishing the date of access, the identity of the individual who accessed the electronic record and the particular action taken.

In response to comments, DHS also amended the interim final rule to require an employer to provide or transmit a confirmation of the transaction only if an employee requests it. Several commenters had objected to the interim final rule’s requirement that a printed transaction record be given to the employee even absent a request.
One commenter noted that some companies process thousands of new employees annually; another noted that in the modern work environment many employees work off site. These commenters expressed concern that requiring paper receipts could be a significant burden to businesses. DHS officials did not think the requirement was unduly burdensome but amended the interim final rule in response to the comments.

If requested, a receipt when completing an electronic record should be provided within a reasonable period of time, but it need not be provided at the time of the transaction.

But DHS cautioned that providing the option of electronic preparation and storage does not alter the requirement that the employer physically examine any documentation provided by the employee in the presence of the employee prior to completing the Form I-9.”